TICKY FULLERTON, PRESENTER: Still in the retail space and the head of Wesfarmers says he can't understand what all the fuss is about over the supermarket milk price war.

Wesfarmers owns Coles, which started the fight by lowering the price of its home-brand milk to $1 a litre.

Andrew Robertson reports.

ANDREW ROBERTSON, REPORTER: Dairy farmers are up in arms and the Senate has launched an inquiry as Coles and Woolworths go toe-to-toe in a marketing battle. But Wesfarmers chief executive Richard Goyder says the issue has been blown out of all proportion.

RICHARD GOYDER, CEO, WESFARMERS: Coles acquires five per cent of the milk produced in Australia.

ANDREW ROBERTSON: Mr Goyder has been in Sydney addressing business leaders for the Committee for Economic Development of Australia. He doubts claims the milk war will hurt producers.

RICHARD GOYDER: Before we took this action, we actually increased the price in every state other than Western Australia - and we've subsequently done it - we increased the price of milk we were paying to the processors. So, the processors deal with the farmers, not Coles.

RICHARD GOYDER: I'd say what Coles is doing is hopefully increasing demand for milk, which will be good for milk producers in the long term.

ANDREW ROBERTSON: The tragedy in Japan also has implications for Wesfarmers. Richard Goyder says its coal division will benefit, as he believes nuclear power will be on the nose for some time.

RICHARD GOYDER: The one thing that won't change is demand for energy and coal will be a significant source of that, at least for a period of time, I think.

ANDREW ROBERTSON: Mr Goyder also believes there'll be other opportunities in Japan once the fear caused by the potential nuclear meltdown subsides and attention starts to focus on the rebuilding effort.